CRM2 is poised to cast new insights for the average investor on what they’re actually paying for – but new disclosure won’t negatively impact the popularity of mutual funds for options such as ETFs says an asset management president.
“I think that like any new product category, ETFs are enjoying growth, and I believe that there’s a place for ETFs in individual, diversified portfolios.,” says Carol Lynde, president and COO of Bridgehouse Asset Management. “However, mutual funds have been a favoured choice for investors for years, and they have served investors incredibly well and think about regulation and structures, and everything that goes along with the fund itself as an investment vehicle.”
She adds that while mutual funds have received some negative press due to their fee structure, demand for them is as strong as ever, despite the emergence of new investing options.
“You’d think that the mutual fund is dead, but I’d disagree – I’d say there’s still a lot of investors out there who prefer and understand the benefit of investing in a mutual fund,” she says.
However, she says, as CRM2 reports are received by investors, demand for regulations to be implemented across other investment vehicles will likely grow.
“I think that what we’re going to see – and we’ve always talked about a level playing field – CRM2 is for securities and mutual funds but we need to think about other products that advisors and investors are using – things like seg funds and GICs; I think - and I am an investor – when I get my report, I will wonder why certain products that I own are not included.”
“Number one, I should understand why they’re not included, and then I should understand the cost of those. But I think at the end, CRM2 will push for continued disclosure on other products.”
Clients want to hear from their advisors on CRM2
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